report to the src women's council of realtors, 6/19/12
DESCRIPTION
TRANSCRIPT
June 19, 2012
With your host…
Gene Wunderlich
The Local Sales Outlook, Economic and Legislative
Forecast,
Current Housing Trends,
Political Climate,
Pending Legislation &
issues affecting our lives and businesses.
It’s The Economy,Stupid
June 19, 2012
With your host…
Gene Wunderlich
STILL
Japanese
Earthquake
&
Tsunam
i
Sovereign Debt
Crisis in EuroZone
Oil Price Spikes
2011: A Year of Economic Wild Cards
Arab Spring
Political
Change on
Capitol Hill
Debt Limit Ceiling & Downgrad
e of US Debt
Stock Market
Volatility
Too many
&
• Federal Economic Policy• Regulations• Unemployment• Foreclosures• Mortgage Interest Deduction• Strategic Foreclosures
• Lenders• Short Sales• Interest Rates• Inflation• Shadow Inventory• Global Economy
3/10 6/10 9/10 12/10 3/11 6/11 9/11 12/11 3/12 6/12 9/12 12/120
50
100
150
200
250
Temecula Polynomial (Temecula) Murrieta Lake ElsinoreMenifee Wildomar Canyon Lake
Southwest California Homes Single Family Homes
Unit Sales
Year to date sales are up 10% over last year (2,945/3,276) and up 3% from their previous high watermark in 2010 (3,179/3,276).
3/10 6/10 9/10 12/10 3/11 6/11 9/11 12/11 3/12 6/12 9/12 12/12$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
Temecula Polynomial (Temecula) Murrieta Linear (Murrieta)Lake Elsinore Menifee Wildomar Canyon Lake
Southwest California Homes Single Family Homes
Median Price
Median price was up 9% over last May ($232,084/$255,199). Year-to-date we are up 3% (231,240/$239,152) over 2011 and a
whopping 2% over 2010 ($235,622/$239,152). Wow! A $3,500 jump in 2 years.
Remember when they were appreciating that much every week?
On Market (Supply)
Pending Closed (Demand) Days on Market Months Supply Absorption rate *0
50
100
150
200
250
300
350
400
253
304
232
74
1.09051724137931
209242
335
209
87
1.1578947368421
220
149
224
116
78
1.28448275862069
159
195
359
183
92
1.0655737704918
223
87
60
21
84
4.14285714285714
5748
65
35
88
1.37142857142857
130
Murrieta Temecula Lake Elsininore Menifee Canyon Lake Wildomar
* Absorption rate - # of new listings for the month/# of sold listings for the month
May Demand ChartSince January
Sales increased 30% Active Inventory decreased 67% (2,240/974)
May Market Activity By Sales Type
Standard Sale Bank Owned Short Sale
Active
% of MKT
Sold
% of MKT
Active
% of MKT
Sold
% of MKT
Active
% of MKT
Sold
% of MKT
Temecula 179 74% 106 51% 1 0% 40 19% 46 19% 60 29%Murrieta 163 62% 120 52% 18 7% 40 17% 68 26% 68 29%Wildomar 19 40% 16 46% 7 15% 8 23% 19 40% 10 29%
Lake Elsinore 75 50% 35 30% 21 14% 49 42% 46 31% 30 26%Menifee 94 48% 79 43% 19 10% 42 23% 75 38% 54 30%
Canyon Lake 57 66% 10 48% 9 10% 6 29% 20 23% 5 24%
Regional Average 587 57% 366 45% 75 9% 185 26% 274 29% 227 28%
62% 247% 83%
• Accelerated 3% withholding
• 4% flat tax – including services
• Point of sale mandates
• Mortgage interest deduction
• 40+ ballot propositions
• Taxes, taxes, & BLT’s
• Attorney General’s Nevada Suite
Risks to Forecast: State
AB 1590 (Campos) Assessment Appeals Boards – The Brown Act requires that local government meetings be properly noticed and prohibits those which have not been. A 1996 attorney general’s opinion found that local assessment appeals boards are not required to comply with the Brown Act. C.A.R. is sponsoring AB 1590 to clarify that property tax assessment appeals boards are subject to the Brown Act. This legislation also includes provisions specifying that deliberations may be held in closed session. Status: Assembly Appropriations Committee AB 1711 (Galgiani) Burdensome Retrofit Standards – This measure defines "unreasonable and unnecessary" in terms of energy efficiency audit and retrofit requirements at "point of sale" as prescribed by AB 758 of 2009. C.A.R. was able to negotiate an agreement with the author of AB 758, obtaining a commitment that if regulators propose point of sale requirements in the AB 758 regulatory process legislation will be pursued to achieve the objectives of AB 1711 to make clear that retrofits must recover their cost over the useful life, and not delay or impose costs at point of sale. With that commitment C.A.R. will not be advancing AB 1711 at this time. C.A.R. will continue to work with regulators on the development of the AB 758 regulations. Status: Assembly Utilities and Commerce Committee AB 1718 (Hill) Degree Brokers – Under current law an applicant for a brokers’ license must have either two years of active real estate experience or have graduated from a four-year college or university with a specialization in real estate. The Department of Real Estate (DRE) has interpreted the “degree” provisions to mean any four-year degree. C.A.R. is sponsoring AB 1718 to clarify the law to require "degree brokers" to have an undergraduate degree with either a major or a minor in real estate in order to claim the experience exemption. Status: Senate Business, Professions, and Economic Development Committee AB 1745 (Torres) Dual Tracking – Currently, the banks’ ability to simultaneously process a short sale and a foreclosure on a single property has resulted in the foreclosure sale of homes which have an approved short sale pending. C.A.R. is sponsoring AB 1745 to prohibit a lender from proceeding to a foreclosure sale against a property if that property has been approved for a short sale. This measure will still allow the mortgagee to withdraw its short sale approval due to a change in the conditions under which the approval was granted. The lien holder would be required to provide a written notice at least 3 days before the withdrawal of approval explaining the reason for the retraction. Status: Senate AB 2225 (Perea) Debt Forgiveness Income Tax - The federal government enacted the Mortgage Debt Relief Act of 2007 that permitted 3 years of mortgage debt relief by not requiring borrowers to pay income tax on debt forgiven in a “short” sale. In late 2008 the federal government extended this relief through December 31, 2012. In 2008, California enacted and C.A.R. supported SB 1055 (Machado) which provided conformity with the federal statute for the 2007 and 2008 tax years and, in 2010, C.A.R. supported and California enacted SB 401 (Wolk) which extended the income tax debt forgiveness until December 31, 2012, conforming to the federal law. C.A.R.is sponsoring AB 2225, to conform state tax law to federal law, when the federal government extends the mortgage debt forgiveness sunset date; AB 2225 will be amended to do so when appropriate. Status: Senate GUTTED – now a bill about erroneous charges from the State Board of Equalization.
DEAD
DEAD
GUTTED
Washington Policy• High-cost Loan Limits - expired 10/1/11 (except FHA)• Future of Fannie and Freddie? FHA?• Tax Reform on the horizon
Mortgage Interest Deduction?Capital Gains?
• QRM (Qualified Residential Mortgage) 20% Down• CFPB & other Dodd-Frank rules• FHFA Bulk Sale Pilot
Fiscal cliff on January 1, 2013 if no new budget compromise…
• Sequestration – deep cuts to military & domestic spending
• End of the Bush era tax model – higher taxes• 3% shaved of GDP.
Risks to Forecast: Federal
Websites for you… WCR-SRCC.org SRCAR.org CAR.org Realtor.org MyRealtorParty.org FaceBook.com/SRCARGAD Slideshare.net/GeneWunderlich SouthwestCA.biz
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